Omni grows presence on Fed. Hill

SLY MOVES: A rendering of planned renovations to the former CJ Fox factory complex, which was purchased by Omni Group last month for $1.6 million. / COURTESY OMNI GROUP
SLY MOVES: A rendering of planned renovations to the former CJ Fox factory complex, which was purchased by Omni Group last month for $1.6 million. / COURTESY OMNI GROUP

The Omni Group Inc. has nearly made one corner of Federal Hill its own.
While development activity in most parts of the city is slow, the Providence real estate investment and management firm has been busy, last month acquiring the long-vacant CJ Fox factory complex next to Interstate 95 for $1.6 million.
Omni plans to gut the former jewelry-box manufacturing plant, renovate the interior, outfit it with new windows and market it as Class A office space to a wide range of business tenants.
Three smaller accessory buildings on the 2.17-acre property will be demolished as part of a total redevelopment plan estimated to cost $5 million.
With the addition of the CJ Fox building, Omni and its affiliates now own 10 commercial buildings on approximately 8 acres of land in the corner of Federal Hill centered on West Exchange Street and Cedar Street and bounded by the interstate and Dean Street.
To connect its properties with the rest of Federal Hill, Omni has taken stewardship of Garibaldi Park on Atwells Avenue and spent more than $100,000 on landscaping and building a bandstand.
“We are committed to the neighborhood, so we will grow as the neighborhood allows,” said Omni principal William DiStefano Jr. of his firm’s long-term plans for the area. “We didn’t have a master plan; it just worked out, and we loved the neighborhood and area. We are pro-Providence, and we think it only has one way to go: up.”
Omni first entered the Federal Hill commercial market in 2006, when it paid $7.95 million for four parcels, including two parking lots on Cedar Street. By 2008, Omni had acquired more than 5 acres on Cedar and West Exchange streets and kept going after the recession, now owning the majority of buildings on West Exchange. Although Omni’s projects to date have taken over existing structures, recent years have also shown an appetite for developing from scratch.
Last year Omni proposed building a six-story, 60,000-square-foot office building on a now-vacant lot at 50 Cedar St. with internal parking decks on the first two floors.
Further west on the same block, Omni has plans for a two-level parking garage running along Cedar between Bradford Street and Brayton Avenue. The parking garage would serve the new 50 Cedar Street building as well as other Omni buildings on the block and, at night, possibly Atwells Avenue restaurants.
The 50 Cedar Street building was approved by the city, but Omni has yet to find an anchor tenant for it and won’t start construction until it does.
The parking-garage plan still needs final city approval of its design.
Whether there is market demand to absorb the 48,000 square feet of new office space being created at CJ Fox as well as an additional 60,000 at 50 Cedar is unclear, but DiStefano is banking on the neighborhood taking off.
He said the existing buildings on West Exchange and Cedar are all 90 percent or more occupied.
Karl Sherry, partner at Hayes & Sherry Real Estate Services, which is listing the unbuilt 50 Cedar Street, sees a number of advantages in the neighborhood Omni has targeted that should make it attractive with office tenants in coming years.
“One thing is parking: we are running out of free parking in Providence and most office tenants are now paying for parking,” Sherry said. “Free parking is a big draw and if you have to pay to park in downtown, it is like adding $7.50 per square foot to your lease.”
At least as important, Sherry said, is being able to offer new or newer construction at rents cheaper or competitive with space on the downtown side of the highway. “We will be in mid-$20-per-square-foot range, which is very competitive,” Sherry said about 50 Cedar St.
At CJ Fox, DiStefano said interior work on the building has already started and demolition of the ancillary buildings was due to begin this month.
When the renovations are complete, the four-story, red-brick building will be re-addressed and named One Cedar Street.
Parking will be in onsite surface lots, some already existing and some in space now covered by the accessory buildings, and is expected to provide 178 spaces.
Sherry expects the CJ Fox building will rent at about $21.50 per square foot, and attract tenants who prefer a loft-style space.
When dividing the Providence office market, Federal Hill buildings are grouped together with properties north of Route 6 in the Promenade District.
Even without CJ Fox or any new building on Cedar, the Promenade District is now the second largest in the city, with 1.2 million square feet of office space, according to CB Richard Ellis New England’s 2012 figures.
It also had the highest vacancy rate of any district, at 23 percent last year, after tenants absorbed 39,000 square feet of space from 2011. There were 276,000 square feet of space available in the Promenade in 2012, CBRE said.
Sherry sees the neighborhood gaining momentum and Omni’s focused expansion of the district will make it more attractive.
“I think the neighborhood is taking on its own identity,” Sherry said. “If you look at pictures of seven or eight years ago, it has been completely transformed. Buildings have been redone, parking redone, landscaping redone and with the addition of CJ Fox, you will see a whole new landscape between I-95 and Dean Street.” •

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